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Technology Stocks : Western Digital (WDC) -- Ignore unavailable to you. Want to Upgrade?

To: Stitch who wrote (10076)	1/17/1999 10:40:00 AM
From: Ian@SI	Read Replies (2) \| Respond to of 11057

Stitch, Nice post. Thanks for the link. Again, I suspect it highlights a difference in our approaches to making money. Both can be and probably are successful. They just deal with different periods of time. I prefer to buy companies, which are quite likely to prosper in the mid to long term, but are currently being drowned in a sea of bad news. WDC fits that bill almost perfectly. Except that within the past couple months, more analysts are seeing the light at the end of the tunnel. If you look at the Semi Equipment performance recently, all it took was a strong desire for the equipment recession to be over before the stock prices have tripled or better off their lows. I wouldn't mind seeing a similar event with this sector. :-) Ian.

To: Stitch who wrote (10076)	1/19/1999 1:08:00 AM
From: InfoMiner	Read Replies (1) \| Respond to of 11057

Stitch, I agree with Ian on this and am also long. First, and foremost I believe investors are considering WD's EPS potential. WD only has 90,000 shares or so with a 1997 market share of 19% (Disktrends). The other independents(leaving out IBM, Toshiba, ETC) have a combined amount of 500,000 shares with roughly 50% of the market share in 1997(see link komag.com for 1997 mkt share and 1998 Jan-Sep Mkt share. and thank Komag!). That is a lot of EPS "leverage." But of course things have gotten worse for WD. Much worse. According to Disktrends, WD's Mkt share has dropped to 14% for the first 9 months of 1998. However, the CEO stated a few months back that demand was "firming" and that their "time to market" had improved. Here is where I get subjective. With the high fixed cost structure typical of DD companies I don't think the CEO would say demand is firming unless demand for WDCs products was at least in the ball park of 1997 demand. They have to make enough $ to cover all those fixed costs or start closing plants. Since I haven't heard too much about layoffs or plant closings I am hopeful. I believe they will report an EPS of -75 cents (or better) for 4th quarter with revenues above 800 million. My long position is risky and my analysis subjective. I can appreciate a short position on this stock and seriously considered it a few months back. Best of Luck, Bradley